Strong spring business in dress, sportswear at G-III
G-III Apparel Group, Ltd. announced operating results for the first quarter of fiscal 2011.
For the quarter ended April 30, 2010, G-III reported that net sales increased by 43% to $154.3 million from $107.6 million in the year-ago period. The Company's net loss for the quarter was $1.4 million, or $0.07 per share, compared to $6.8 million, or $0.41 per share, in the prior comparable period.
The Company noted three recent developments that occurred in May 2010:
• As announced previously, the Company entered into a license agreement with the Jones Jeanswear Division of Jones Apparel Group, Inc for the launch of Andrew Marc men's jeanswear. Sales of these products are expected to commence in the fourth quarter of 2010.
• The Company has signed two new licenses with Calvin Klein. Inc., a wholly owned subsidiary of Phillips-Van Heusen Corporation, one for women's “Calvin Klein” better handbags and small leather goods and one for “Calvin Klein” better luggage, with first shipments of these products expected in 2011. The Company now has eight license agreements for Calvin Klein products.
• The Company entered into an amendment to its loan agreement that, among other things, increased the maximum line of credit from $250 million to $300 million, reduced the interest rate on borrowings by 0.25% and extended the term of the agreement an additional two years to July 31, 2013.
Morris Goldfarb, G-III's Chairman and Chief Executive Officer, said, “We are pleased to have delivered an excellent first quarter. Our revenue and margin performance was driven by a combination of strong spring business in the dress and sportswear categories, and continued improvements in both sales and gross margin at our Wilsons retail outlet store business. Across the board, our product lines have delivered the right mix of fashion and value for a variety of tiers of distribution.”
Mr. Goldfarb continued, “We have carefully planned our inventory, implemented effective cost controls, and are strategically driving to capture market share in a number of key categories. Our improved order book for the Fall and Holiday season compared to last year has given us increased visibility and, while we are mindful of the risks in this market environment, we believe we are positioned for another strong year.”
Mr. Goldfarb concluded, “We are thrilled to have Jones Apparel Group launch our Andrew Marc Jeanswear line. In addition, we are very proud and appreciative that Calvin Klein and Phillips-Van Heusen have chosen and entrusted us with licenses, beginning in 2011, for “Calvin Klein” brands' women's better handbags and small leather goods and better luggage. These new initiatives will help us grow the range of our product offerings as we continue to transform our business into a more diversified apparel company serving multiple tiers of distribution.”
The Company is forecasting net sales of approximately $950.0 million for its fiscal year ending January 31, 2011, compared to $800.9 million in the prior fiscal year. The Company is also forecasting net income of $44.0 million to $46.0 million, or between $2.20 and $2.30 per share, compared to net income of $31.7 million, or $1.83 per share, in the prior fiscal year. The Company is forecasting EBITDA for the fiscal year ending January 31, 2011 to increase approximately 35% to 40% from fiscal 2010 to a range of approximately $83.3 million to $86.3 million compared to EBITDA of $61.6 million in fiscal 2010. EBITDA should be evaluated in light of the Company's financial results prepared in accordance with US GAAP. A reconciliation of EBITDA to net income in accordance with US GAAP is included in a table accompanying the condensed financial statements in this release.
The Company is forecasting net sales of approximately $160 million for its second fiscal quarter ending July 31, 2010, compared to $135.9 million in the prior year's second fiscal quarter. The Company is also forecasting a net loss of $0.2 million to $1.0 million, or between $.01 and $.05 per share, compared to a net loss of $2.8 million, or $0.17 per share, in last year's second quarter.
G-III Apparel Group Ltd.